Netflix Rewinds DVD vs. Streaming Split, But Damage Is Already Done

Qwiskter idea axed less than a month after its announcement

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Netflix (NASDAQ:NFLX) critics have been very vocal since the Sept. 1 move that separated the stock market darling’s streaming video from DVD rentals. And it has been one wild ride for NFLX stock in recent weeks.

First, we learned that 1 million Netflix customers defected because of the changes. Then, Netflix CEO Reed Hastings stumbled through an apology with lines like, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.” Shares of NFLX stock went from over $300 in July to as low as $108 per share recently.

This morning, the latest sordid storyline in this movie drama is that Netflix will in fact abandon its plans to separate the streaming and DVD businesses. The company previously said its DVD-by-mail service would operate via a separate website, Qwikster.com, but now that plan looks to be dead in the water.

Hastings released a statement that said, “Consumers value the simplicity Netflix has always offered and we respect that.” Netflix shares were soaring 10% in pre-market trading on the move.

But before Mr. Hastings, Netflix fans and NFLX stock owners get carried away, remember one thing: You can’t rewind this flick. Like a B movie experiment that goes wrong, wreaking havoc on small-town America, this Netflix debacle is not so easily resolved by wishing it away.

Here’s why:


Article printed from InvestorPlace Media, http://investorplace.com/2011/10/netflix-rewinds-dvd-vs-streaming-split-but-damage-is-already-done-qwikster-nflx/.

©2014 InvestorPlace Media, LLC

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